A recent analysis by Roy Ramthun concludes the new law will probably lead to major changes in how consumers can use Health Savings Account plans.

The new law limits these consumer-controlled accounts in two ways: it restricts the types of health products you can purchase with your HSA money, and it doubles—to a whopping 20 percent—the tax penalty for withdrawing HSA funds to cover non-medical expenses.

But the worst news is the provision requiring all policies to cover at least 60 percent of the actuarial value of the benefits offered. What’s the actuarial value? Will contributions to HSAs be included in these actuarial-value calculations? HHS Secretary Kathleen Sebelius will make that call. And if she rules “no,” then high-deductible health plans including HSAs will no longer be viable… and you can kiss your plan good-bye.

Comments (8)

Since opponents of HSAs assume HSA holders only buy them because they’re healthy, the inclination will be for HHS to curtail the use of HSAs so the “unspent” funds that would accumulate in the HSAs are instead, left in the insurance pool.

Why does it have to get so complicated? It was so much simpler when you went to the doctor when you were sick and paid the bill when it came in the mail.

If the goal of Obamacare is to create a culture of dependence on government, then the HSA is going to be their first target. Demonstrating your ability to pay for your own care is detrimental to the goal of a single-payer system.

This is a huge decision that Sebelius will be making. People in the individual market will already be facing huge rate increases as a result of this legislation, and high deductible HSA-qualified plan are really the only recourse people will have to lower their costs. If she rules no, it could add to the backlash as more and more people find them unable to afford health insurance. If she says yes, it could explode the use of HSAs, and provide some hope that we don’t end up with a single government-payer system.